The National Assembly Standing Committee on Finance was told on Wednesday that the government was aiming to end all subsidies in the next fiscal year. Pakistan People’s Party (PPP) MNA Fauzia Wahab, who chaired the meeting, told reporters that the committee was informed that the government planned to end all general subsidies from the next fiscal year and would provide only targeted subsidies to vulnerable segments of society.
She said the government wanted to eliminate tariff differential subsidy on electricity estimated to be around Rs 186 billion in the current fiscal, and other general subsidies estimated at Rs 43 billion. The government is under immense pressure from international financial institutions to end the electricity subsidy and pass on the full impact of increase in international oil prices to consumers. If implemented, these changes would further increase the cost of production, negatively affecting businesses, leading to loss of jobs and increased inflation.
She said during the next year, the government would continue with the austerity and expenditure cuts in the next fiscal year. The expenditure cuts had helped save Rs 22 billion during the current fiscal year, she said. She dismissed opposition claims that the government statistics were misleading, saying that opposition members should attend the meeting to challenge any figure they thought incorrect.
During the next fiscal year, the meeting was told, the government planned to contain the fiscal deficit to 4.5 percent of the Gross Domestic Product (GDP) and improve the tax-to-GDP ratio from the current 9.1 percent to 9.7 percent. The government also planned to continue the ban on new recruitments, the meeting was told. The meeting was also attended by the Muttahida Qaumi Movement’s Abdul Rashid Godil, Awami National Party MNA Bushra Gohar and Federally Administered Tribal Areas MNA Munir Orakzai, all of them government allies.
The opposition parties, however, continued their boycott of the meeting. Pakistan Muslim League-Nawaz MNA Shahid Khaqan Abbasi, who attended part of the meeting and left in the middle without signing the attendance sheet, told reporters the proposed budget strategy was “misleading”, since fiscal deficit was on the rise and the government had no focus and was simply brushing it under the carpet. “They could not substantiate their figures, they did not say how they finalised these figures,” said Abbasi.
The meeting was also told that despite floods, terrorism, power shortage and rising international oil prices, the economy was projected to grow by 2.8 percent in the next year.
